Impact of Internal Control Weaknesses on XBRL Disclosure

• In Event: Government, Audit and XBRL

Abstract

This paper investigates whether the mandated XBRL disclosure facilitates timely reporting to users of financial statements along with internal control weaknesses (ICWs). We, first, find that firms with ICWs delay more after their first detail tagged XBRL disclosure than control firms did. We also find this relation is heightened when ICWs firms are only composed of smaller firms. Next, we find that firms with ICWs tend to use the grace period in their initial XBRL disclosures, and that the length of the grace period for ICWs firms are longer than control firms. Our findings indicate that ICWs cause greater time associated with implementing detailed tagging, and firms with ICWs tend to use grace period to reduce timing burden in XBRL disclosure.

Authors

• Seokyoun Hwang, CUNY College of Staten Island

• Won Gyun No, Rutgers University

• Jongkyum Kim, SUNY-New Paltz